Posts from the ‘Ontario Divorce’ Category

If a spouse declares bankruptcy, is he or she then prevented from claiming for equalization of Net Family Property (NFP?) under Ontario Family law?

That was the question in Kinsella v. Mills, which involved a couple who had separated after 7 years of marriage. At that point, they signed Minutes of Settlement that finalized the splitting of their financial affairs, which was intended to deal with all issues including spousal support, equalization of NFP and constructive trust claims. The Settlement reflected the couple’s agreement that the husband would take sole ownership of the matrimonial home and assume all debts and costs, and in return would pay the wife an agreed lump sum, together with a monthly amount.

Less than a year later, the wife declared bankruptcy. She was automatically discharged nine months later. The couple’s divorce was formalized a few months after that.

The wife then applied to the court to set aside that Settlement, claiming that it was unfair, signed under duress, and in a situation where she had no independent legal advice and did not know what she was signing. If she was successful, the wife planned to re-launch her claim for equalization of NFP, and wanted it divided unequally in her favour.

The husband resisted, pointing out that after the marriage breakdown he was left with a large amount of debt. Because of the wife’s bankruptcy, she was released from having to pay it, but he was still saddled with debt that they had rung up together. Nothing about the Settlement was unfair, in his view.

The court was asked to make a ruling. It observed that nothing in the Family Law Act or the federal Bankruptcy and Insolvency Act specifically prevents a spouse from making a claim for equalization of NFP after declaring bankruptcy. However, after examining the interplay between the two, the court concluded that the legislation operated to effectively do so. The court noted the following:

The wife’s claim to any equalization payment from husband fell within the very broad definition of “property” under the bankruptcy legislation.

The moment she declared bankruptcy, she was no longer entitled to dispose of or otherwise deal with her property. Instead, it immediately vested in the bankruptcy trustee.

Once any equalization claim vested with the trustee – and unless the trustee actually joined the wife in the Family Law proceeding – the wife’s hands were tied.

The court added that this impasse be remedied by the wife being discharged as a bankrupt, but getting the trustee’s consent to go forward, or by firing the trustee. The Family Court also had no authority to undo the wife’s bankruptcy.

Having found the wife to lack the capacity to bring the equalization claim, the court added that the Settlement itself was not subject to being undone, since there was no evidence of duress. The wife had also failed to obtain legal advice before signing it, despite being encouraged to do so.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

If You are Divorced in a Foreign Country, Can a Canadian Court Make Orders Too?

The facts in Cheng v. Liu are a little unusual, but the core question was this:

If a couple’s divorce is validly granted outside of Canada by a foreign court, does this preclude a Canadian court from later making any corollary orders – such as rulings on issues of support or custody – arising from that same divorce?

The husband, an engineer, was a Canadian citizen who lived in Canada. The wife lived in China and had never been to Canada. They got married in China in 2006 and had a daughter who lived with the wife in China her entire life. They separated about a year after getting married, in around late 2007 or early 2008.

The wife then covered all the legal bases: She applied in China for a divorce, and custody of their child. She also applied in Canadian, under the federal Divorce Act, to ask for a divorce, as well as spousal support, child support, and custody. Finally, also in Canada under the Ontario Family Law Act, she asked for equalization of net family property.

Meanwhile, the Chinese court granted the wife her divorce and awarded her sole custody of the child. The wife’s other Ontario-based claims were still pending.

The husband, faced with all of these competing actions requiring his response, asked the Ontario court to suspend (or “stay”) the proceedings so that the entire matter could be determined in China. This led to several rulings and some procedural wrangling, and ultimately a hearing before the Ontario Court of Appeal for its determination.

Against this complicated background the Ontario Court of Appeal had a simple question to consider: In light of the Chinese divorce order, could a Canadian court make additional orders relating to child support, spousal support, and equalization of property?

The Court’s conclusion was mixed: The divorce-related issues were closed for consideration, but the child support issues were still up for an Ontario Family court to rule on.

On the first point – and based on longstanding precedent that considered the provisions of the federal Divorce Act – the law states that once the foreign Chinese court had made a valid divorce order, this removes the authority of the Ontario court to hear and determine corollary matters. So on the remaining divorce-related issues, the Ontario court had no authority.

However, the situation under the provincial Family Law Act was different: the Ontario court could still rule on questions relating to child support, since the foreign court in China had not already done so in its divorce order. The Family Law Act allowed child support claims to be made even after a divorce, and the foreign divorce order had no impact on that. Indeed, the whole purpose for the Ontario legislation was to ensure that parents provide financial support for their dependent children. Allowing the Ontario court to continuing to make orders under the Family Law Act even though the Divorce Act provisions had been trumped was actually a harmonious outcome to ensure child support would be covered.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

I wrote a recent Blog about the admissibility of surreptitiously-recorded telephone conversations in Family law proceedings. I have also written several times on how courts approach the admission of Facebook evidence.

Particularly in nasty divorce and custody disputes, it is likely that courts will have to grapple with these kinds of issues regularly, given how easy its become for spouses to try to secretly gather evidence against each other, using a Smartphone, keystroke logger, spyware, etc.

But for the average embattled spouse locked in bitter litigation, how effective is this as an evidence-gathering mechanism for use in Family court?

The answer: Not very.

Under Canadian law, secretly-gathered computer data, emails, internet history, video, audio and similar evidence is generally not admissible in routine Family law hearings, except in unusual circumstances and only after a court has held a separate mini-hearing, called a voir dire, on the specific issue. Overall, the odds are not very good that such evidence will be admitted.

Case in point: In a called T. (T.) v. J.(T.) the court considered a situation where the husband had hacked into his wife’s private email, using the password she had allowed him to have when the marriage was in happier times. The emails disclosed what was, in the court’s words, “an arguably disturbing exchange between [the wife] and her lawyer, which could be interpreted as evidencing some potential risk or threat to his safety.” Still, the court found the husband’s email hacking was not only unjustified, it was a clear violation of the wife’s privacy rights. The court also concluded that the email evidence irrelevant and inadmissible.

Similarly, in a decision in U. (A.J.) v. U. (G.S.) the court considered whether to admit evidence that the husband had collected through the use of spyware he had illegally installed on his former wife’s laptop. The evidence showed the wife’s activities on internet chat rooms, and established that she had engaged in extra-marital sex. The court examined the issue in the context of the couple’s dispute over custody and access issues, ultimately concluding that the affair and the online activity was out-of-character for the wife, and was not reflective of her ability to parent the children of the marriage. The court added that it would be “a rare case” that illegally-obtained evidence should be admitted, and only after the trial judge holds a hearing to determine its admissibility. The burden was always on the party seeking to enter such evidence to establish “a compelling reason to do so.”

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

I have reported previously about a case called M.M.B. (V.) v. C.M.V., the background facts of which are not terribly unique: After their split in 2013 the parents had agreed to a “parallel parenting” and equal-time arrangement for their three children. The mother now claimed that in the time since, the father had been engaging in a concerted effort to alienate her from them. She asked for sole custody and an order that the father undergo therapy.

What’s more noteworthy is the rather epic court ruling in their case, which spanned over 1200 paragraphs, where the court recounted a dizzying array of tactics by each of the parents; overwhelmingly, however, the ruling focused on the misconduct of the father, who the court repeatedly noted had viewed himself as being “in a war” with his former spouse and determined to “win” at all costs.

Among the many accusations of rather mind-boggling misconduct on his part, one of the more interesting ones involved him using an app installed on the mother’s own cell phone to “track” her location. As the court explained the gist of the mother’s testimony:

During the last two years of the relationship prior to separation, her evidence is that the [father] became more volatile and threw things at or near her. The [mother] testified that he was obsessed with the idea that she was having an affair. Her evidence is that she had never had an affair during the marriage.

She further testified that the [father] had a constant need to be “in control” and that he utilized a feature on her cell phone to be able to track her whereabouts. Two examples that she cited were, on one occasion when she attended at a lawyer’s office in July 2011, he telephoned her four times during her appointment with the lawyer, knowing exactly where she was at the time. The second example she gave happened in August 2011. They were in New York for a few days and she left early to return to school. While the [mother] was still in New York, she claims that he was able to track her whereabouts and knew that she had taken a different route home. She says that she did so in order to look at possible housing for her and the children. He accused her that she was travelling to a residence for purposes of having an affair.

As further proof that he was tracking her whereabouts through her cell phone, she indicated that she, as a result of these situations, learned that there was a “track my phone” feature on her phone which she then disabled. Shortly thereafter, however, she testified that he insisted on having her cell phone for some unrelated purpose. When he returned it to her she noticed that that the tracker had been reconnected. …

When asked about the allegation of tracking the [mother] on her cell phone, his explanation for his knowledge of her going to a lawyer is that their cleaning lady told him this in July 2011 when the [mother] was going to the lawyer.

When asked about the feature of “find my phone” so that he could allegedly track her whereabouts from his phone, he has a very “plausible” explanation. He claims that because he was using his phone for Association work they jointly downloaded this app so that she would be able to find his phone in the event that he lost it.

Regarding the knowledge that he had that the [mother] was on a different route on the way home from New York City, the [father] once again has a “plausible” explanation. His brother who is a real estate agent, by happenstance, was showing a house across the road from where the [mother] was driving. His brother took it upon himself to call the [father] to report that he had seen his vehicle, thinking that it was the [father] but of course it was the [mother].

This court views each of these explanations with a great deal of cynicism.

That cynicism was borne from many other conflicting and incredible explanations by the father, including one piece of “smoking gun” evidence noted by the court several hundred paragraphs later:

In response to the [mother’s] concern that the [father] was tracking her and the children’s whereabouts, the [father’s] response is somewhat contradictory. On the one hand, he “denied this” and stated that he “doesn’t care where she goes”. On the other hand, on several occasions, he admitted to “wanting to locate the children and not her”, which he believes to be a safety issue. He said he ”was able to locate the children by their cell phone devices”.

This was an admission by the [father] that the court finds is consistent with the evidence given by the [mother] at trial; that she knew that the [father] was tracking her movements through her cell phone. The court finds that this is inconsistent with the [father’s] “explanations” of how he knew the [mother’s] whereabouts on two separate occasions at about the time of the separation. He specifically denied under oath at trial that he was tracking her whereabouts through her cell phone. Undoubtedly, he had forgotten what he said during the assessment, or did not expect this court would take the time to read all of the exhibits.

Particularly as it relates to the father’s highly misguided win-at-all-costs focus, the M.M.B. (V.) v. C.M.V. decision is a virtual judicial textbook on “How Not to Behave” in the post-separation phase. It could be interesting reading for those who can get through the 1,200-paragraph judgment.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

A Day in the Life: Court Uses “Ladder” Metaphor to Get Through to Firefighter Dad

In an upcoming blog about an Ontario court decision in which the court was tasked with sorting out a particularly acrimonious, high-conflict separation and divorce between couple. The result was a written court ruling that took up more than 1,200 paragraphs.

Obviously, the court had quite a lot to say. And what was especially noteworthy was the court’s attempt to “get through to” the parents in a manner that they will understand.

The court prefaces that unusually-lengthy ruling with the following comments:

In addition, of course, to the monies spent by the parties, there has been an incredible expenditure of community resources in an attempt to address the conflict this family faces.

The financial cost is just one aspect of the damage done to this family.

The emotional cost to the parties, and in particular to the children, is something that cannot be quantified.

This court heard fourteen days of trial.

This court, at the risk of being accused of being delusional or blinded by eternal optimism, has crafted a decision pursuant to which the court is optimistic that the respondent father’s mentality can be changed from one of “war” as it has been described until now, to one in which the objective is changed from “winning” and “destroying” the other parent to one in which the objective is to have an environment pursuant to which the children can be free to love both parents and can freely move back and forth between them willingly, happily and without the need for the intervention of any of the resources earlier referred to.

This court is not naïve and does not expect that that will occur overnight but on the other hand, this court believes that if it did not try to create that situation it would have let these children down and simply “given up” on them. This court is not prepared to do that.

The court’s next step was to comment on the approach taken by each of the parents throughout the protracted litigation, first to castigate the father, and then to laud the mother. About the father, the court used a metaphor that it hoped would resonate with the father, writing:

As will be seen in this judgment, this court has found that the respondent father has engaged in a “war” as two witnesses have indicated he characterized it at the beginning. The respondent of course denies that he said this but his actions speak far louder than any words that he could have uttered.

The respondent is an acting District Fire Chief and therefore the court has found it appropriate to use a word picture involving a ladder, being a piece of equipment associated with firefighting.

This court finds that the respondent has climbed a ladder and reached the top almost realizing his perceived goal. That goal was to have control over the children and to be in a situation where the mother of those children, being a mother whom he chose for them, was totally marginalized. He almost achieved that goal in that the children at their current ages have each expressed that they do not wish at the current time to have any meaningful relationship with their mother, nor to spend time with her on a regular basis.

This court hopes that the respondent father will see, as this court sees so clearly, that the wall that his ladder should have been against, and the wall that hopefully he will climb after he climbs down from this current ladder is one in which at the top of the wall is a situation whereby the children have a healthy relationship with both parents and can freely love each of them without feeling any guilt towards the other. Love is not a finite quantity pursuant to which if you give love to one of your parents you must take it away from the other. In fact, the children can also love the respondent father’s girlfriend as a “stepmother” without having to feel that by doing so they need to thereby not love their biological mother.

In contrast was the mother’s conduct throughout, which the court found was praise-worthy overall:

This court would be remiss if, in its summary of this case, it did not comment on the applicant mother. This court finds, as with any parent, the applicant mother is far from perfect. In fact, some of her actions, likely taken out of fear of losing her children, exacerbated the situation. This court finds that her parenting style is far more structured than that of the respondent father which “played into” his desire to alienate the children from their mother.

Having said that, the applicant mother has been subjected to not only emotionally abusive treatment from the respondent father and those under his “control” but emotionally and even physically abusive behavior from the children. The court does not “blame” the children as, there is an obvious reason why they are behaving in the manner in which they are behaving.

Many, and in fact probably most, mothers even those who deeply love their children would have “thrown in the towel” by now, but the applicant mother did not. That, this court finds, is not only to her credit but will be something that this court anticipates in years to come will be greatly appreciated by her children.

With that preface to the subsequent 1,200 paragraph’s worth of specific rulings designed to resolve the couple’s dispute, the court added – perhaps optimistically – that:

… this court has crafted a decision that it believes is one that could result in a 180° change being made in their lives from one of adversarial conflict between their parents, the extended families, and unfortunately the children themselves and their mother, to one in which they are allowed once again to “be children” and not have to constantly be concerned about the conflict between their parents.

The court’s stated objective is a good one, and it applies with equal pertinence to anyone embroiled in family litigation involving custody and access issues.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

An interesting recent case considered a novel legal argument by a 23-year-old man who unexpectedly found himself the father of a child he didn’t plan to have, after a brief relationship with a 38-year-old woman he met a music festival.

The father, an apprentice iron worker, was in an intimate relationship with the mother for several months. After learning from the mother that she was pregnant, he decided that he did not want to be involved and they ended their relationship before the child was born. The mother had sole custody, and the father essentially had chosen to have no contact with the child whatsoever.

Nonetheless, the mother brought an action against the father for child support. He resisted, claiming that under the “strict terms of their sexual engagement,” he made had it clear to the mother that he did not want to become a parent. Although they did not use condoms or other physical birth control, they engaged in the “withdrawal method” to prevent conception. He also claims the mother told him she was “medically infertile.”

Essentially the father asked the court to recognize a new civil claim in tort, one that featured a “hostile sexual act” of the theft of the DNA contained in his ejaculate. The court described the father’s stated position this way:

The father argues that he is not legally obligated to pay child support because the mother engaged in a “premeditated theft of the father’s DNA” during “a hostile sexual act of DNA theft” leading to the birth of the child. According to the father, he was a victim of the theft of his DNA by the mother “to satisfy the [mother’s] motive to bear a child prior to the [mother’s] biological reproductive expiration.”

The mother brought motion for summary judgment, asking for an immediate court order requiring the father to pay child support, and dismissing the father’s claim outright, on the basis that there was no genuine issue requiring a trial.

The court granted the mother’s motion, and ordered the father to pay. There was simply no legal basis for the father’s attempt to create a new defence against the mother’s child support claim. Not only did the court not recognize the tort of a “hostile sexual act of DNA theft”, but even if it existed it did not relieve him of his legislated obligation under the Ontario Family Law Act to pay child support. There was no dispute as to the child’s paternity.

The man and woman had engaged in consensual sex, and had not used birth control (except for the unreliable “withdrawal method”, which the court found was actually evidence that the father did not rely on the mother’s own birth control methods, or on her self-proclaimed infertility). In short, with their decision to have unsafe sex came with inherent risk of unwanted pregnancy, and with it came child support obligations in law.

In assessing the amount of support the father had to pay, the court noted that the father’s income suddenly dropped significantly when the mother started her court application for child support. He was currently unemployed, was not looking for work, and had provided the court with no persuasive medical or other evidence on why he was not working despite being capable. Under Ontario law, he had an obligation to earn at whatever level he capable of doing so. Based on the undisputed evidence, the father would be able to earn $35, 000 per year, and his support obligation and arrears were calculated accordingly.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

These days, not a week goes by without some sort of sexual scandal in the news. Recently, it has focused on allegations of sexual harassment by prominent figures and celebrities but this merely adds to usual crop adultery-scandal coverage that routinely graces the cover of magazines seen while waiting in the check-out line.

I was reminded of an older Family Law decision the other day, which considered the question of whether one person can sue another for cheating on them, or for falsely promising to marry them or have an exclusive relationship with them.

The decision in Lee v. Riley raised exactly this scenario. The matter came before the court the initially to consider whether the lawsuit actually raised any valid legal claims. (Under Canadian law, this process serves as a preliminary “screening mechanism” for weeding out those claims adjudged to be entirely without merit, so as not to waste the court’s time (and the taxpayers’ money) on frivolous or otherwise untenable lawsuits. The prevailing test at the time was whether it is “plain and obvious” that the cause of action cannot succeed.)

In Lee v. Riley the woman had sued the man for what has a rather novel claim. As the court put it:

The plaintiff [woman] alleges that the defendant [man] failed to advise her that he was involved with another women whom he later married while he was carrying on an intimate relationships with her within a context of an apparent ongoing developing relationship. When she discovered the truth, the [woman] claims that she became ill and has suffered damages. The [woman] asserts a number of causes of action arising out of these facts, including assault, intentional infliction of mental suffering, and fraudulent or negligent misrepresentation.

Although it appeared to have sympathy for the woman, the court dismissed her claim outright, having found no supportable, legal cause of action in her pleadings. The court wrote:

The [man’s] conduct, as alleged, is morally reprehensible and disgraceful. Nevertheless, the law has never punished either criminally or in civil proceedings, the untruths, half-truths and other inducement which accompany seduction, absent a fraudulent relationship or the presence of a known serious transmittable disease. The [woman] knew who the [man] was and knew the [illegible text] sexual acts being undertaken. The law cannot protect every person against the kind of behaviour the [man[allegedly manifested. Relationships involve risk-taking. People should be honest but it is well known that frequently they are not.

What are your thoughts? Are there circumstances where the law should recognized a claim in damage by the cheated-on partner?

For the full text of the decision, see:

Lee v. Riley, 2002 CarswellOnt 5558

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

Most separated and divorced parents are at least vaguely aware that there are certain enforcement mechanisms available in cases where a parent fails or is unwilling to pay the child support that he or she has been ordered to pay by a court.

Specifically the Family Responsibility Office (FRO), which is a provincial government agency, enforces child and spousal support from delinquent support-payers, and to this end has various enforcement tools at its disposal. These include garnishment of the support-payer’s wages, and suspension of his or her driver’s license.

But people may not be aware that a parent in default may also face jail time, under the provisions of the Family Responsibility and Support Arrears Enforcement Act (“FRSAEA”). Although this outcome is not common, it does arise in some cases.

The recent decision in Ontario (Director, Family Responsibility Office) v. Garrick was one of them. The father owed child support arrears for over $55,000, which amount had been racked up over several years. He explained the non-payment with the fact that much of those years had been spent behind bars, after his highly-publicized conviction for fraud perpetrated against several well-known people, including “two football icons” and a doctor at the Hospital for Sick Children. And while he had now served his time and was released, he claimed that with his criminal record and notoriety, he was now practically unemployable in the community.

The court did not buy it. It observed that the father had not provided financial disclosure of his income, nor did he bring forth evidence as to the jobs he had applied for, or the rejections he received. The court also added that his evidence fell short in other ways, too:

A payor in a default proceeding has the onus [under the FRSAEA] of proving that he or she has accepted responsibility to pay child support and has placed the child’s interests over his or her own. Mr. Garrick has provided no evidence of having done anything of the sort.

Indeed – and despite the father’s claims to the contrary – the court found that he was healthy and employable, but had wholly abdicated his support responsibilities to his child while continuing to live an affluent lifestyle. He had spent a full seven years actively avoiding his financial obligations to his own child.

Turning to the available recourse in these situations, the court noted that the role of incarceration was to compel the father’s compliance with his support obligations, not to punish him. However, the court added:

I have considered all of those submissions. But the court must conclude that this is a textbook case of a payor arranging his affairs in order to avoid paying the support that he has been found to be capable of paying. [The father] has carried the metaphorical keys of his prison in his pocket. If he is incarcerated, he has, for reasons of his own, chosen to lock himself in.

The court ordered the father to be incarcerated for 90 days, or until the child support arrears were paid in full. Additional jail time was ordered in the event that on a going-forward basis the father continued to put himself in default.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

This blog builds upon our previous blogs Saving the Golden Goose: Part I and Part II to discuss the importance of privacy, protection, and planning in managing the effects of separation and divorce on family businesses. One illustration of this arose in a case whereby both spouses owned shares in the family company. As an additional wrinkle, a third business partner was involved and actively expressed concerns about the effect of the separation and divorce on the business.

One spouse actively managed the finances of the business, and the other was less involved. This created an unbalanced feeling for the second spouse, who felt that they were open to being taken advantage of financially. The spouse in active management of the business was incredibly concerned about market changes and the viability of the business going forward into the future. This vulnerability split into discussions around how the business should be properly valued.

The spouses had several adult children who had been supported by the family business in various ways throughout their teenage years and adulthood, either through part time jobs or full time employment. These children had very vocal views on how the couple’s separation should proceed. The children also felt that the family cottage should remain in the possession of the spouse who was in active management of the family business, as it was a retirement plan.

In this matter, a full team approach was utilized to create a creative solution which met the spouse’s needs amidst the “background noise” of the children and the business partner. The family professional was able to mitigate any backlash from the children expressing their feelings about the family business and the cottage, and the financial professionals were able to ensure that the non-managing spouse felt competent enough to actively participate in the financial negotiations.

In order to ensure that the family business was preserved, several options were suggested by the team to the spouses:

Shares from non-managing spouse be transferred to managing spouse; other family property transferred to non-managing spouse

Shares from non-managing spouse be transferred as a gift to the children

Non-managing spouse retains cottage; managing spouse leases family cottage back and covers operating and capital costs with option of re-purchasing in the future

Non-managing spouse retains the shares for a period of five years during which the managing spouse acts as the voting proxy, after which time the managing spouse has the option of buying back the shares at the current value

Associated issues such as the capital gains liability of each scenario, as well as the valuation dates for transferred property were also taken into account. Notably, these options would not be available in the traditional court context. Perhaps most importantly, the spouses would not have had the “luxury” of being supported by an interdisciplinary team and provided time to process and decide which option made the most sense to themselves, their family, and their business.

The above case examples illustrate the ability of collaborative family law to shape a resolution with the best interests of the family business at the core. The collaborative process emphasizes privacy, protection, and planning. By keeping the matter outside of the courtroom, families can maximize their privacy with respect to the highly personal matter of restructuring their family and business. The collaborative process offers a respectful alternative to the court system for those wishing to ensure that their legacy remains intact for generations to come through estate and succession planning for the business. The business does not need to be destroyed by family restructuring. Minimizing the financial and emotional impact of a separation and divorce on both the family and their business is a tall order, but it can be done with the support of an interdisciplinary team who is specially trained to identify creative solutions with the goal of resolution. This process allows spouses to take back control of your family’s future from impartial third party adjudicators. Divorce and separation may represent both an ending and a beginning. Collaborative practice helps spouses anticipate and include their need to move forward, and makes the future of their business a key priority.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

To Get or Vary Child Support, Do Your Kids Still have to be “Children”?

An Ontario Court of Appeal decision recently brought to the forefront an interesting little legal point, about the court’s authority to make or change child support orders even after children are too old or too independent.

Under Canadian family law, section 15.1 of the federal Divorce Act allows a court to make an order requiring a parent to pay child support for any “children of the marriage”. (And this term is defined by the Act to include: 1) a child under the age of majority (who has not otherwise withdrawn from his or her parent’s charge), and 2) a child who is over the age of majority but still dependent.)

Based on a prior ruling decided by the Supreme Court of Canada, a court only has the authority to make a child support order if, at the time of the initial application by the parent, the children fall under this “children of the marriage” definition. In other words, if the support-recipient parent waits until the children are over the age of majority or no longer dependent, then he or she is out of luck since the court lacks jurisdiction to retrospectively make a child support order at that point.

A recent Ontario Court of Appeal decision called Colucci v. Colucci, the court considered a related question: Can a parent apply to the court to vary a child support order, even after the children stop being “children of the marriage”?

The facts of the case involved a father of two children who had been ordered to pay child support but eventually fell into arrears of more than $175,000. By that time, both children ceased to be “children of the marriage.” Faced by the prospect of a significant decline in his income as an unskilled labourer, the father brought a motion to change the child support order retroactively, and have his arrears rescinded on the ground that there had been a change in circumstances.

The Appeal Court reviewed the governing law when an order could be varied, as found s. 17 of the Divorce Act. It was differently worded than the initial-support provision in section 15.1; the stated test for whether a court had the authority to vary an order was different from the test to make an order in the first place. The Appeal Court concluded that based on that wording, a court did indeed have jurisdiction to vary an existing order even after the children are no longer dependents. (And from an Ontario family law perspective, it should be noted that this aligns with the court’s jurisdiction under the provincial Family Law Act to vary child support orders retroactively in such circumstances).

Although the Colucci decision does not foretell that every parent’s application to vary child support will succeed (since that must be determined on a case-by-case basis), the law is now abundantly clear that a court had the authority to change orders even after the children no longer fall within the “children of the marriage” definition.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

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FamilyLLB is written by Russell Alexander, a divorce and family law lawyer based in Ontario, Canada. For nearly twenty years, Russell's firm has helped clients who are going through a separation or divorce. You can find more of Russell's online commentary via Twitter, Google+, LinkedIn, or on the firm's Facebook page.